Greif (GEF), down 1.1% since the last earnings report: Can it rebound?
The last earnings report for Greif has been over a month ago. Shares have lost about 1.1% in that time frame, outperforming the S&P 500.
Is Greif on the verge of a breakout or will this continue as a negative trend leading to its next earnings report? Let’s first look at the most recent earnings report to see how analysts and investors have reacted.
Grief Q4 Earnings, Sales Miss Estimates; Decline Y/Y
Greif reported adjusted earnings per share of $1.83 in the fourth quarter fiscal 2022. This was lower than the Zacks Consensus Estimate $1.97. The bottom line fell 5.2% year-over-year.
Inclusion of one-time items, the quarter’s EPS was $1.67, compared with $1.74 the previous year quarter.
Operational Update
Sales decreased 5.2% year-over year to $1.496 million. The Zacks Consensus Estimate for $1,585 Million was not met by the top line.
Year-over year, sales costs were down 7.6% to $1.186 million. Gross profit amounted to $310 million, up 4.7% from the prior-year quarter’s levels. The gross margin came in at 20.7%, up from last year’s 18.8%.
Selling, general and administrative expenses came in at $140 million compared with the prior-year quarter’s $142 million. In the fiscal fourth quarter, adjusted EBITDA rose 3.5% year over last to $218.7million.
Segmental Performance
Sales in the Global Industrial Packaging segment came in at $825 million compared with the prior-year quarter’s $952 million. The segment’s adjusted EBITDA amounted to $96 million compared with the year-ago quarter’s $121 million. This segment’s results dropped mainly because of lower volumes and foreign currency translation. Also, the sale of the Flexibles Products & Services business negatively impacted the top line of this segment by $84 million. Higher average selling prices partially offset the negative impact.
The net sales of the Paper Packaging segment increased 7.1% year over quarter to $666million in the fiscal fourth-quarter. The segment’s adjusted EBITDA moved up to $121 million from the prior-year quarter’s $88 million. The partially offset increase in net sales by higher boxboard and containerboard prices was partially due to lower volumes.
The Land Management segment’s sales totaled $5.3 million in the reported quarter compared with $4.9 million in the year-ago quarter. Adjusted EBITDA was $1.9 million compared with the year-earlier quarter’s $2.2 million.
Financial Position
Greif reported cash and cash equivalents in excess of $147 million at fiscal 2022’s end, compared to $124.6 million at fiscal 2021’s end. The cash flow from operating activities was $658 million in fiscal 2022, compared to $396 million in prior fiscal. As of Oct 31, 2022, long-term debt was $1,839 Million, compared to $2,054 millions as of Oct 31, 2020.
On Dec 6, Greif’s board announced a quarterly cash dividend of 50 cents per share of Class A Common Stock and 74 cents per share of Class B Common Stock. The dividend will go out to shareholders that were in effect at Dec 16, 2022’s close. GEF paid $111.3 million to stockholders in cash dividends during fiscal 2022.
Fiscal 2022 Performance
Fiscal 2022 adjusted earnings per share came in at $7.87. This was lower than the Zacks Consensus estimate of $8.03. Fiscal 2021 saw a 40.5% increase in the bottom line. The fiscal 2022 fiscal EPS included one-time items was $6.30 compared to $6.54 for the previous fiscal. The total revenue for fiscal-year 2022 was $6.3 billion. The Zacks Consensus estimate of $6.4 trillion was missed by the top line. The adjusted EBITDA was $917.5million, compared to the $764.2million adjusted EBITDA from the previous year.
Outlook
Greif anticipates fiscal 2023 adjusted cash flow between $410 million to $460 million. Expected adjusted EBITDA to be between $820million and $906million.
How have estimates changed since then?
Analysts were silent during the past two months as they did not issue any revisions to their earnings estimates.
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